The Equalization Program and Atlantic Canada

February 1, 2001

Note: Paper copy only

Vol. 35, No. 4, Winter 2001

The equalization program has been an essential component of Canada’s federal-provincial transfer mechanisms for over 40 years. Canada’s eastern provinces, including Quebec, have qualified for equalization entitlements since its inception. In recent years, attitudes towards equalization have changed markedly. One perspective is that the program inhibits progress towards more efficient economic policies. On the other side, there is concern within receiving provinces that the overall decline in federal transfers since 1995 is gradually downgrading the ability to deliver essential services. This issue addresses key considerations looking forward, including constitutional obligations, energy royalties and any potential revamping of the program.